Appendix A - Direct Purchase Order Process Manual

Introduction

Direct Purchase Orders (DPO’s) enable individual departments and units to purchase goods and

services directly with a value of $2,000 or less without prior approval or processing through

Procurement Services Department. The purpose of this policy is to provide faster procurement

services to the departments and units for low-value goods and services and will utilize the

Procurement Services Department for more value-added and strategic procurement functions.

Goods and services procured through a DPO are for AUC business use only not for personal use.

• Direct Purchase Orders (DPO) for goods and services with a value from $501 to $2000 per order.

• Direct Purchase Orders (DPOs) are required to purchase goods and services that fall under the control of the

respective department/unit unless approves the exception. Examples of exceptions are:

IT hardware and software requests are processed through the IT department.

Construction goods and materials requests are processed through the Construction department.

Printed items are processed through AUC printing services.

Goods and services excluded from DPO are:

• Imported non-educational items, as well as hazardous/restricted items that need prior government approval (e.g.

NTRA, Pharmaceutical authority, National security, Laser Institute).

• Stamps

• Stock items available at AUC main stores unless the stock item quantity is not sufficient and there is no Purchase

Requisition (PR) in place for re-ordering.

• Fixed asset equipment and furniture

• Used equipment or trade-in items

• Contracted Services

• Governmental Goods and services (Electricity, gas, Water, Work permits, Licenses renewals……etc.)

DPO Process Flow

Purchase Requisition –Transaction Code ME51N

The requesting department creates

Direct Purchase Requisition ( DPR )

The authorized user reviews and releases

DPR

The authorized user creates Direct Purchase

Order ( DPO )

Secure department head approval on the

DPO and send it to the vendor

Receive Goods / Services & Original

Invoice

Prepare a payment request signed and

supported by the full documents

Submit the payment request along with the full documents to the

Controller's Office

The Controller's Office reviews the full

documents submitted

The Controller's Office process the payment

as a final step

1‐ The requesting department will create a new DPR.

2‐ Select the document type ZDPR Department Direct PR.

3‐ Just entered the Account Assignment Category “K”,’P’ Cost Center and project,

then the system will ask about the requester.

4‐ Select any material, (let us select from the materials under the Material Group 17‐00‐

004, with the Cluster Owner Transportation.

This material is non stock item. So, the system will not check the availability of this item in the AUC

main stores.

5- Enter Quantity, Cost Center, Purchasing Org, then the item Value, then the system

will ask you about the Vendor Code.

6- Enter the Vendor Code in the required field or you can search for the vendor in the

AUC vendors list.

7- Fill out any required data in the Account Assignment as appeared in the below screen such as the GL Account, Business Area, Cost Center, etc…

Note 1

In case of the DPR value exceeds the permitted limit of $ 2000, the below text massage will appear as it is not permitted to create a DPR with a value more than $ 2000 according to the DPO policies and procedures.

Note 2

IF we changed the quantity to be 5 instead of 100 to have a PR with a total value less than 2K USD,

and check again you will get a message, No message issued during the Check.

PR Collective Release –Transaction Code ME55

The PR will have a release Strategy applied as this material related to material group

under the transportation cluster owner.

The cluster owner will run a transaction with all the pending PRs.

Now is the role for cluster owner to review and approve the PR.

Cluster Owner should enter his own release code, for transportation in our case here it

will be ZT

Then press on Execute Icon and the system will provide you a list with all the pending PR’s

that need approval from the cluster owner.

Cluster owner can double click on the PR line item to open the main PR to review before releasing .

Then the cluster owner in the requesting department will release the PR after reviewing by using

transaction code ME54N.After that, press on the release strategy icon and click on the status to

release the PR. Now the PR is released successfully.

Note

In case of the material number entered in the PR is related to a stock item in AUC main stores, the system

will check the availability of this item in the stock quantities as appeared below because you are not

allowed to purchase any goods available in AUC main stores according to the DPO policy. If this item is not

available in AUC main stores, you can purchase it after checking the availability.

Create Purchase Order – Transaction Code ME21N

Purchase orders are used to purchase goods and services with an estimated price not to

exceed $ 2000.A purchase order is a legal document governed by commercial law. It is

available to any authorized person and its use is mandatory.

The purchase order constitutes the final and entire agreement between the vendor and

the university.

Purchase order gives the vendor authority to deliver and invoice the ordered goods and

becomes the university’s commitment for the amount and value of those goods.

Now is the role for Financial Manger to create the purchase order with reference to purchase requisition.

Enter Transaction Code - ME21N

Select Document Type – ZDPO Department Direct PO Choose the Selection Variant button.

As appeared on the SAP screen, press on icon number 1 and choose purchase requisitions

(Number 2).

Enter the purchase requisition number that you want to use in the

DPO.Then, press on execute icon and drag the PR and drop it into the DPO

shopping cart icon and the PR will be reflected automatically in the DPO.

You can see that our PR number has been transferred to new purchase order. You can

save it and the system will assign a document number as a reference for this DPO.

Now you have created the DPO successfully and you can save your DPO or make any

additional changes.

The DPO is created without GR Based as requested. So that we can proceed with the payment

to the vendor directly without creating the GR document.

Finally, you can press on print preview icon to display the entire DPO after creating. Then,

you have to print out the DPO and secure the signature of the head of department.

Tttttttttttttt

Thank You